Sap Vendor

SAP For Insurance A focuson Billing and Collections

Robert Schwartz

Industry Principal

SAP 32 Years of Making Businesses Successful

SAP AG in 2004 revenues: $ 10 billion 67,500 installations 20,000 companies run SAP Providing 23 Industry Solutions 38,000 SAP employees 1000+ installations in the Insurance industry

12 million users in 120+ countries team with us to Integrate their business processes Extend their competitive capabilities Get a better return on information at a lower total cost of ownership

Industry Leader Leading provider of business process industry solutions 350+ insurance customers; 20 plus in North America $1B in Research and Development per year 8,000 developers; 800+ focused on insurance

SAP for Insurance

Business Partner

Policy

Management General Ledger

Controlling

SupplierRelationship

Mgmt

Claims

Management

Financial Asset ManagementProcurement

Commissions

Collections & Disbursements

Product Management

Claims

Handling

Customer

Service

Acquisition

and sales

Marketing

Management

Reinsurance

Projects, etc

Human Capital Management

Strategic Enterprise Management Business Information Warehouse

MDM PortalX-Apps X-i BI KMBusiness Process

Mgt Mobile, etc

Financial

Strategy

Operational

Billing &Collections

Governance

ChangeManagement

Capabilities

What billing and collection issues are insurersfacing?

Billing and Collections - Current State

OtherProducts

Product

Customer Broker/Agent Individual/GroupOther Business

Partners

Billing andReceivables

System

Customer

System 1 System 2 System 3 System 4 System 5 System 6 Manual System n

Retro PlansP&CWork

Comp.Business

Life FleetCreditLife

ClaimsDeductible

ClaimsSalvage

PremiumAudit

P&C Retro PlansPolicy andContract System

P&C Life Fleet Credit Life Manual OtherProducts

WorkComp

Risk Assessment / Retention Revenue Lift

Working Capital ImprovementOperational EfficiencyImprovements

Policy Services&

Billing

CustomerAcquisition /

Retention

AccountsReceivable Collections

There are four significant benefit opportunities for billing& collections across the application to cash life cycle.

CD

Policy

Claims

Insureds

Broker/AgentsVendors

Claimants

External Adjusters

Litigation

Vendors

Service Providers

ServiceProviders

SAP Collections and Disbursements (CD) controlscash flow to all parties in the entire insurance cycle

Central viewof all cashflowandexpenditures

Minimize expensesassociated withmanagingpayments/collections

ImprovecashflowANDcustomersatisfaction

Centralview ofal lparties

Reinsurance

Commission

. . . .Reinsurers

Retrocessionaires

FS-CD creates an efficient environment that enablescontinuous improvement


Working Capital ImprovementOperational Efficiency

Policy Services&

Billing


Retention

AccountsReceivable Collections

Automated Workflow Task Creation Task Management Task Assignment Management Control

Automated Clearing User Defined Hierarchy Based Criteria Based Configurable Defined by Rules

Access To Information Centralized View of All

Data Manage processing

without interrupting work

Reduced Environment Costs Shared Services Common Platform Reduced Maintenance

Increase the amount collected and decrease the timerequired to collect it



Policy Services&

Billing


RetentionAccounts

ReceivableCollections

Reduce DPO All payment types supported Electronic bill presentment

and payment Reduce reconciliation

periods/workload throughon-line reconciliation or EDI

Receive cash faster Release cash faster

Improved GL reconciliation

How has billing/payments affected your ability to groworganically or through acquisition?



Policy Services&

Billing


RetentionAccounts


Increase Speed to Market Tailor billing to Market/Product/State Quickly implement changes to support new markets

(configuration vs. customization) Support payment requirements for new markets

claims, vendors, etcIncrease Value of Acquisitions

Quickly fold acquired business into account structure Minimize disruption to acquired customers

Billing may not be a differentiator but it generates themost complaints



Policy Services&

Billing


RetentionAccounts


Interaction Call Center On-line EDI

Billing Support Account Current (Broker/MGA) Account Receivable (Agent) Direct Account Level Billing

Payment Support EFT ACH Check Credit Card Account Sweeps

Reduce Negative EquityRisk

State Sensitive BillingStructures

Credit Scoring

Reducing Negative Equity

CD

Late orUncollectiblePremium

ClaimsPayments

Net AccountProcessing

CD helps insurers manage cashflow from a singlesource .

OtherProducts

Product

Customer Broker/Agent Individual/GroupOther Business

Partners

FS-CD

Customer

LossSensitiveP&C

WorkComp.

BusinessLife

VehicleContracts

CreditLife

ClaimsDeductible

ClaimsSalvage

PremiumAudit

P&C Loss SensitivePolicy andContract System

P&C Life Vehicle Credit Life Manual OtherProducts

WorkComp

Accommodates ALL billing& collections requirements

in a single solution

Provides a single source forALL premium information

Provides a policy / premium subledger in coordination with the GL

Removes constraints withthe batch windows

Consolidates processing ofpayments reducing cycle time

CD

Portal

Fully Integrated

And enables a flexible environment

Insured Group Agent/Broker Third Party

Call Center

SAP Collections & Disbursements

Personal Lines

CommercialLines

SpecialtyLines

Financials

Fully IntegratedDis

trib

uti

on

&

Ac

ce

ss

Co

reP

roc

essin

g

Syste

ms

User Selected

Channel

Mail EDI

Collections Offerings Solution Set (priorities)

XXXCombined insurance & technologypartner experience

XXXScalability

XXLeverage SAPs technology capabilities

XXReduce amount of interfaces

XXLeverage other investments

XXSupport regulatory requirements

XXXEnable continuous improvement

XSupport new market growth

XXReduce negative equity

XEnable cross selling / retentionactivities

XXAccount processing consolidated bill

XXSupport shared services

MitigateRisk

LowerExpenses

BusinessStrategy

Performance

14,200,000 per hour for transfer of posting data (20 apps, 320 jobs)

3,600,000 per hour for posting run (7 apps, 112 jobs)

8,900,000 per hour for correspondence (6 apps, 96 jobs)

Results of a high-end performance test.

Austria andSwitzerland(9): Generali, A Wiener St_dtische,A WGKK Mobiliar, CH Swiss Life, CH Zuerich FS, CH Winterthur, CH SUVA, CH PAX, CH

Americas (9): Allstate ADP Tax Services Great West Life American Re CincinnatiFinancials OSDE, Argentina MONY Life Employers ReAIG Rest of Europe (15):

Cesk_ poji_tovna, CES Vseobecna zdravotnapoistovna BNL Vita, Italy INA, Italy ITAS, Italy Assimoco, Italy Toro Assicurazioni, Italy AXA, Portugal Folksam, Sweden Generali, Netherlands ING, Netherlands Interpolis, Netherlands KBC, Belgium Mapfre, Spain Generali, France

UK (2): Standard LifeInternational AA Centrica

Germany (26): Berlinische Leben Zusatzversorgungskasse MLP Finanzdienstleistung Generali M_nchen Provinzial Kiel VersicherungskammerBayern Bruderhilfe Condor Versicherung Sparkassenvers. BW Sparkassenvers. Wiesbaden AOK, Bonn Karlsruher Versicherungen Barmer Ersatzkasse Inter Versicherungen Gerling Konzern Deutscher Ring Mannheimer Versicherung Munich Re VBL BVV VW Financial Services _VB ARAG Hannover R_ckversicherung Alte Leipziger TDS Informationstechnologie

FS-CD: Customers Worldwide - live

Total: 75, live 30

Australia:Mercantile Mutual Holding

SAP solutions are designed for international use

Arabic

Bulgarian

Chinese (Simplified)

Chinese (Traditional)

Croatian

Czech

Danish

Dutch

English

Finnish

French

German

Greek

Hebrew

Hungarian

Italian

Japanese

Korean

Norwegian

Polish

Portuguese

Romanian

Russian

Serbian

Slovak

Slovenian

Spanish

Swedish

Thai

Turkish

CD Implementations

SAP supports 30 languages, from a single instance:

Time

Cap

abili

ty

Carrier decisions have produced a climate that fostersthe continued creation of systems akin to the old"legacy" systems.

They create systems that behave as if they werecreated years ago, being inflexible or dealing only withthe "siloed" system of which they are part.

Carriers need to curtail the creation of futuregenerations of systems that rapidly lose their ability toadapt to new conditions. This means placingemphasis on the development and execution offlexible and open architectures for both ITinfrastructure and development methodologies.

Source: TowerGroup 2/8/2004

NetWeaver delivers significant ROI and TCO Reductions: BG Group: 281% ROI; 43% TCO Reduction (5 yrs) Goodyear/Dunlop: 308% ROI; 25% TCO Reduction

Source: IDC Case Studies

SAP Claims SAP Claims

Collections/Disb

SAP Claims

Collections/Disb

SAP Claims

Collections/Disb

Reinsurance Reinsurance

Policy / UW

SAP Business Warehouse, NetWeaver / .NET Integration

LegacyCapabilities(e.g., Policy,

UW)

LegacyCapabilities

LegacyCapabilities(e.g., Policy,

UW)

LegacyCapabilities

Legacy Technology Stack

Point Solutions

PointSolutions

PointSolutions

Point Solutions

TCO

According to Gartner Research study of TCO - December 12, 2002: Productivity of bought applications tends to exceed that of built

applications by more than 3:1 Bought Applications cost 40% less than built applications

Individual SAP products improve effectiveness and reducecosts. Multiple SAP products dramatically improves TCO

Implementation Methodology

Implementation Approach ASAP Driven

Define customersolution based on

SAP processes

ProjectPreparation

BusinessBlueprint Configuration

ASAP Driven

Project Management

Project Administration

CustomerDevelopment

Configure processes Test processes

Training

Define project

Set up system landscape

Final Preparation and Go Live

ProjectPreparation Final

Preparation

SAP QualityReview

ProjectPreparation

ProjectPreparation

SAP QualityReview

BlueprintBlueprint

RealizationRealization

FinalPreparation

FinalPreparation Go Live &

SupportGo Live &Support

RealizationGo Live &SupportBusiness

Blueprint

ContinuousChange

Implementation Monitoring SAP Services

SAP QualityReview

SAP QualityReview

SAP GoingLiveChecks

SAP GoingLiveChecks

SAP EarlyWatch Alert

SAP SolutionManager

Schedules & Tasks

Project Preparation Define project team and roles

Project Charter and Standards

High-level blueprint and technical requirements document

Training plan

Proof of Concept Install hardware and software

Bring up sandbox

Limited proof of concept configuration

Limited interfaces to policy and other systems

Business Blueprint Complete planning and design

Define business processes, master data, org structure, reports, forms, etc.

Confirmation of project scope

Schedules & Tasks

Realization Bring up develop, testing, QA, production environments

Configuration and unit testing

Documented BPPs

Interface development and testing

Formal transport procedures

Final Preparation Production plan

Cutover plan

System testing

End user training

Documentation

Go-Live & Support Help desk

CSN resolution

Sap Vendor

Documents

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